Are you Training for the Gold?
I recently watched the movie Miracle about the 1980 USA hockey team for the third time. In the movie, legendary coach Herb Brooks told his team that they may not be the best team on the ice, but they would be the best prepared. This inspired some self reflection. Am I dedicating enough time to preparing myself to help clients perform better? Although a brief perusal of my timesheet indicates a fair amount of prep time, I’m sure I could do better. Then I began thinking about our clients. Not a strategic planning session goes by where our clients do not discuss their plan to differentiate from competitors by the quality of employees, the relationships they develop, and their service to customers. But doesn’t being different by having superior employees require a focused effort? Are your employees continuously working to elevate their game, as Brooks’ players were? There appears to be two things working against programs to continuously develop employees to be superior to the competition. The first is regulatory compliance. So much of client training and development budgets are wrapped around BSA, Truth in Lending, Reg D and the myriad of other laws and regulations that we must abide by. While being compliant gives us the opportunity to remain in business, it does not bring in a nickel of revenue.
The second factor keeping banks from developing employees is culture. This can take two forms: senior leadership does not believe in it or fear their well-developed employees will flee and/or employees do not believe they need it. Yet, intuitively, a financial institution that claims to have the best employees would seemingly require a world-class employee development program. Few, in my experience, have it.
I am not a training expert. TKG does not specialize in employee training. But I am witnessing a divergence from what clients want out of their employees and what they prepare them to accomplish. Of course you want your employees to comply with laws and regulations, and chances are you provide training for it. But if you want them to build relationships and become trusted advisors, what role do you play in elevating your employees’ game?
I have four suggestions. The first suggestion is to identify employees that are in positions where they have very little chance to meet expectations. Bank executives can be loyal to a fault. However, a 20-year employee that once was a good lender but drags his or her feet in executing your strategy of developing full commercial relationships will only serve to sink your strategy by continuing to do what they always have done. No employee development program is going to change them, so you may need to make the change.
The second suggestion to elevate your employees is to develop a world-class training curriculum designed to teach the skills to exceed job requirements. Yes, this will include compliance training. But it should also include skills valued in your strategy such as relationship building, personal or business financial management (we are in the finance business, aren’t we?), supervising, coaching, etc. This can be done very formally with a combination of internal and external classroom time, industry schools, online curriculum, and on-the-job training (OJT).
In my Navy days, I spent time as a training supervisor. Sailors were required to elevate their skills in multiple disciplines. We created a training plan by position and tracked progress using simple spreadsheets (see figure below). Those that demonstrated promise received training for the next job level as recognition of their potential. Training was a combination of classroom study, self study, OJT, and experience.
My third suggestion to elevate employees is to create a meaningful rewards program to salute fine performers. Incentive compensation should be transparent to the employee and reward the behaviors and outcomes consistent with your strategy. Incentives should also be meaningful, accounting for over ten percent of the employee’s total compensation. Recognize high achievers often and in public. The recognition and elevated incentive compensation encourages loyalty.
Those that fail to meet minimum criteria for incentive compensation illustrates either your lack of success in improving a promising employee’s performance or their inability to excel in that current job. Positive action would be required. GE, under heralded CEO Jack Welch, cut its bottom ten percent performers each year. This breeds a higher-level workforce. Nothing is more discouraging to a high level performer than to receive a four percent raise, while the low performer gets three percent.
My fourth suggestion is to develop and maintain a culture of continuous improvement by building supervisory skills that includes coaching, informal feedback, and regular performance reviews. Performance reviews have devolved into CYA nonsense to protect employers in case an employee is terminated. Supervisors tend to regard them as administrative headaches.
What a performance review should be is formal documentation of the feedback already given to employees by a good supervisor. It should highlight superior performance, identify challenges, and map a plan for improvement. Oh yes, and it should provide illumination of top versus bottom performers.
If you are successful, it will likely be due to superior employees which will provide your institution with a sustainable competitive advantage. Admittedly, you will probably incur greater compensation expense. This is a great segway for a gratuitous plug for TKG’s profit improvement service to reduce unnecessary processes, systems, and expenditures. Wouldn’t a shift away from non-value added expenditures to an investment in your people be worth it?